Anti-Neiman-Marcus and MaceRich ► If you can't beat the referendum beat their petitioners

Walnut Creek CA: In 2009 there was a referendum against Broadway Plaza's expansion related to Nieman-Marcus.  That referendum was defeated in part by brute force.  There are few witnesses and no investigation as that's what happens when the powerful have their way with your community - they put up pretty domes to convert public assets into private property.  Pretty we build and they take what need for themselves. 

On Dec 10th 2013 I arrived at City Hall for the MaceRich hearing.  Upon arrival I spoke with and had a minor but productive and cordial conversation.  When I was speaking across the room to Mr. Wedel, Mr. Simmons walked in then walked out.  I'm sitting quietly in the back when several officers arrive with allegations I was disturbing the meeting.  

It's apparent that Mr. Simmons was the caller but luckily for me I knew Officer Martinez and the Sargeant so things went smoothly but then I was told I couldn't speak at the hearing that there was no public comment. Fortunately the officers checked with the City Attorney who said that indeed Mr. Bennett can speak as it's the American Way and we stand united in letter the public process move forward.  I spoke against Macerich and apparently my complaints in the third attempt to raise issues went unheeded. 

A few days later I attempted to get public records on MaceRich and this time again the police were called - they raced over from less than 100 feet as their offices are ... on the same floor.  

IN 2010 I was told I couldn't get records and it required a police officer, in 2011 the same and in 2012 i was ticketed over 500, my truck was towed from layers of tickets from Broadway Pointe who are connected to Benny Chetcuti Jr. who is Mr. Forgery 

as I met the man who was attacked at the Safeway just I've been attacked at Safeway, just like my friends have been attacked.  This is not a complaint about Safeway at 500 South Broadway this is a complaint about attacking a referendum.  

In the Anti-Neiman-Marcus as per ballotpedia so these poor little petitioners are often down on their luck.  

Unfair Competition

Any fraudulent, deceptive, or dishonest trade practice that is prohibited by statute, regulation, or the Common Law.

How more dishonest can you get - beating up suspects (me), beating up residents (Marina Evans left in coma), beating up petitioners (Anti-Nieman-marcus) and then of course were going to venture into the Broadway Plaza Crime Wave.  

I've been through this and seen the Fake Crime Wave many times including my own in Walnut Creek.   

$10 signatures

According to Joe Mathews of Blockbuster Democracy, petition signature collectors in Walnut Creek "say they are being paid $4 for each signature they collect outside retail establishments -- and $10 (yes, you read that right) a signature for door-to-door work. Those are among the highest payments for work on a local petition that I've ever seen in California."^[8]

Walnut Creek Referendum on Neiman Marcus (2009)

Broadway Plaza

Contents

 [hide] 

• 1 Two anti-Neiman referenda
• 2 Neiman Marcus supporters
• 3 Measure I
• 4 "Right to vote" initiative
  • 4.1 Provisions
  • 4.2 Opposition
• 5 Campaign donations
  • 5.1 Against Neiman-Marcus
  • 5.2 For Neiman-Marcus
• 6 How initiatives get on the ballot
• 7 $10 signatures
• 8 External links
• 9 References

The Walnut Creek Referendum on Neiman Marcus is an attempt by Taubman Centers, the owner of Sunvalley Mall in Concord, California, to use the veto referendum process to overturn a May 19 decision of the Walnut Creek City Council that would allow a Neiman Marcus store in Walnut Creek to add 48,000 additional square feet in the open-air Broadway Plaza development.^[1]

Opponents of the Neiman Marcus development collected signatures, for the second time in a year, to oppose the Walnut Creek City Council's approval of the expansion plans of Neiman Marcus. They are organized in a group called RAMPART, which stands for "Residents and Advocates for More Parking and Reduced Traffic."^[2]

However, the Walnut Creek City Council declined to put the referendum measure on the ballot, instead putting Walnut Creek Measure I on the November 3, 2009 ballot. On September 1, a Superior Court judge rebuked the city council, and ordered them to put the referendum measure on the ballot. However, the deadline for certifying a measure for the November 3 ballot has passed. The city council will therefore have to put the measure on a special election ballot after November 3. The city council is also considering an appeal of the judge's decision.^[3]

Walnut Creek, located in Contra Costa County, has a population of about 65,300. Neiman Marcus would like to build an expanded retail presence in the currently vacant former David M. Brian store. they've proposed a two-story, 35-foot-high building and a parking garage with 175 free spaces.^[4]

Two anti-Neiman referenda

RAMPART, the Taubman-backed group opposing a Neiman Marcus expansion at Broadway Center, circulated two veto referendum petitions challenging decisions of the Walnut Creek City Council:

• One petition asked voters to put a measure on the ballot that seeks to overturn the city council's approval of the Neiman Marcus project.
• A second petition asked voters to put a measure on the ballot that seeks to overturn the city council's approval of a development agreement between the city and Macerich, which owns Broadway Plaza.

Signatures on both referenda were turned into election officials and were validated as sufficient. However, the city declined to place the measures on the ballot.^[2]

Neiman Marcus supporters

Logo of "Say Yes for Walnut Creek"

A group called "Yes for Walnut Creek" is in favor of the Neiman Marcus expansion. This group unsuccessfully attempted to dissuade residents of Walnut Creek from signing the referendum petition through a petition blocking campaign. Among other activities, the group sponsored a robocall from former Mayor Gwen Regalia asking people not to sign the anti-Neiman Marcus petitions.

Chuck Davis is the vice-president of development for Macerich, the company that owns Broadway Plaza. He said, "We hoped the outpouring of community support for the new plan would be enough to convince Taubman to stop interfering in the decisions that should be left up to Walnut Creek's residents and leaders. We expect, however, that this time it will be much more difficult for Taubman....But if it happens, we are prepared to fight for the future of Walnut Creek and Broadway Plaza. It's just too important to let a rival developer set the course of this community for generations to come."^[1]

Measure I

See also: City of Walnut Creek Broadway Plaza, Measure I (November 2009)

Store owners in Broadway Plaza and other supporters of expanded retail opportunities in Walnut Creek filed ballot language and collected signatures on a ballot initiative that competes with the anti-Neiman Marcus ballot measures. Measure I will authorize a 92,000-square-foot "anchor retail building" to be built at Mt. Diablo Boulevard and South Main Street, the site of Broadway Plaza. If that is approved, Neiman Marcus intends to take up that slot.^[5]

Former arts commissioner Carole Wynstra, former Mayor Gwen Regalia and Rossmoor resident David Smith filed the wording for the proposed initiative. Wynstra said, "A key purpose of this initiative is to preserve the retail vitality of Walnut Creek ... and make sure decisions about Walnut Creek's future are made by Walnut Creek residents."^[5]

"Right to vote" initiative

Walnut Creek residents organized in the group RAMPART ("Residents and Advocates for More Parking and Reduced Traffic"), the same group that circulated two veto referendum petitions opposing the city council's approval of the Broadway Plaza developed, have also now filed a 21-page initiative in that will, if approved, give the city's voters a direct say on any proposed developments in the city over a certain size. Such developments would have to go on a city-wide ballot for voter approval, according to this initiative.^[6]

According to Selma King, an organizer of this initiative, "What we are hoping is it will wake people up, especially the City Council ... and make them realize people are unhappy. You can send messages out and say 'fix this.'

Provisions

Some of this details of this initiative include:

• Any proposed retail project at or over 40,000-square feet in the "retail gateway area" would have to go on the ballot for a vote of the people.
• Height limits in the retail area can't change without a vote of the people.
• Physical parking spaces must be built for development at or over 40,000 square feet. Valet or mechanical parking lifts could not be used or considered as new parking.

Opposition

Opponents believe that this "right-to-vote-on-development" initiative is aimed at Broadway Plaza but would have negative ramifications for all development in Walnut Creek. Walnut Creek developer Brian Hirahara says that if this initiative gets on the ballot and passes, it will shut down development in the city.^[6]

Hirahara also believes that this proposed initiative:

• Encourages strip mall development
• Will "destroy the quaintness and character of our downtown and force retailers and jobs into neighboring retail districts such as San Ramon."^[6]

Campaign donations

Against Neiman-Marcus

Rival developer Taubman Centers has spent $224,337 in 2009 on its efforts to qualify two referenda intended to block the Neiman-Marcus development from going ahead. Taubman funds RAMPART ("Residents and Advocates for More Parking and Reduced Traffic"). As of August 5, 2009, it had given the group $169,000 and had $54,000 in unpaid bills. Taubman is the only donor to this group, as of early August. Taubman also spent $95,000 in 2008 on a different effort. Of the funds spent by Taubman in 2009, $154,000 went to paid circulators.^[7]

For Neiman-Marcus

Macerich spent $217,803 to qualify an initiative for the ballot. A different group, "Yes for Walnut Creek", that supports the Neiman-Marcus idea, spent about $33,000.^[7]

How initiatives get on the ballot

Once the language has been filed, Walnut Creek's city attorney must review it. Once the attorney has said that the language is suitable, circulators have 180 days to collect the signatures of 15% of Walnut Creek voters.

$10 signatures

According to Joe Mathews of Blockbuster Democracy, petition signature collectors in Walnut Creek "say they are being paid $4 for each signature they collect outside retail establishments -- and $10 (yes, you read that right) a signature for door-to-door work. Those are among the highest payments for work on a local petition that I've ever seen in California."^[8]

External links

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MAGNATE FUND #1 LLC at 1204 Alpine Road Walnut Creek CA

Filed 9/12/13  Chokatos v. Magnate Fund # 1 CA1/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

JOHN N. CHOKATOS,             Plaintiff and Appellant, v. MAGNATE FUND #1 LLC et al.,             Defendants and Respondents.	A137174             (City & County of San Francisco             Super. Ct. No. CGC 10-500839)
GIANCARLO MARANGHI,             Plaintiff and Appellant, v. MAGNATE FUND #1 LLC et al.,             Defendants and Respondents.	A137187             (City & County of San Francisco             Super. Ct. No. CGC 09-487944)

            Plaintiffs John N. Chokatos and Giancarlo Maranghi appeal judgments of dismissal in favor of several defendants following orders sustaining without leave to amend demurrers to plaintiffs’ third amended complaints for fraud (complaints). We consolidated the appeals for review.

            Plaintiffs allege individuals and related corporations conspired to operate a “Ponzi scheme” in which money was borrowed from plaintiffs with false promises that the loans were secured by deeds of trust. We conclude the court rightly sustained demurrers brought by several limited liability companies because plaintiffs failed to allege adequately facts that support the alter ego or single enterprise doctrine under which plaintiffs seek to hold the affiliated companies responsible for the acts of other companies. The deficiency may be cured, however, and we thus conclude that the court erred in denying plaintiffs leave to amend their pleadings.

background

            Plaintiffs allege that defendant Benny Chetcuti, Jr., represented himself as an experienced real estate developer offering safe investment opportunities in his projects when, in fact, he was operating a Ponzi scheme with z and their related companies.

            According to plaintiffs’ complaints, Chetcuti and his company Chetcuti & Associates, Inc. (collectively, Chetcuti) “borrowed money from his victims, usually short term loans, with the promise of high . . . returns.” Chetcuti signed promissory notes and issued deeds of trust to properties owned by himself or “other entities” to secure the loans. Before recording the lenders’ deeds of trust, Chetcuti issued and recorded deeds of trust in favor of Simonse and related entities on unfunded sham loans “that would totally encumber the property.” “Simonse and his other entities would then foreclose on the properties, leaving the victims without any security for their loans, and defendant Simonse and his entities would have free and clear title to the properties, without actually making any loans. Defendant Simonse would then create new entities, and transfer title of the foreclosed properties to the newly created entities, without any consideration, to make the properties even more removed and difficult for the creditors and victims of defendant Chetcuti to recover the security for their loans.” “When defendant Chetcuti could not find enough investors to pay for various other loans, the scheme collapsed, leaving his victims with unpaid promissory notes with no security for their loans.” Chetcuti filed for bankruptcy. According to plaintiff Chokatos, Chetcuti perpetrated fraud upon at least 114 victims who suffered an aggregate loss of $28 million or more.

            Plaintiff Maranghi loaned Chetcuti $250,000 secured by a lien in the form of a trust deed on a Woodward Street property. Chetcuti defaulted on the loan and Maranghi has not been able to collect because Chetcuti did not record the deed of trust and Magnate Fund #2 LLC, managed by Simonse, made sham loans and recorded deeds of trust on the Woodward Street property before Maranghi could record his deed of trust. Magnate Fund #2 then foreclosed on the property and transferred title to 55 Woodward LLC, another Simonse entity.

            Plaintiff Chokatos’s allegations are similar. Chokatos says he contributed $500,000 toward a $2.8 million loan to Chetcuti secured by a deed of trust on a Parkridge Drive property. Before Chokatos’s deed of trust was recorded, Magnate #2 made a sham loan to Chetcuti secured by a recorded deed of trust. Magnate Fund #2 foreclosed the Parkridge Drive property pursuant to the “scheme and plan” of Chetcuti and Simonse “to leave plaintiff and others with an unsecured loan.” Magnate Fund #2 then transferred title to 20 Parkridge LLC, another Simonse entity.

            Plaintiffs sued the individuals and entities directly involved in the disputed real estate transactions as well as other entities. At issue here are claims for fraud, declaratory relief, and elder financial abuse (pled by Chokatos alone) against eight defendants that successfully demurred to the complaint: Magnate Fund #1 LLC, Magnate Fund #3 LLC, JWS Capital Management, Inc., LHJS Investments LLC, 27th Street Associates LLC, South Van Ness Street Associates LLC, 55 Woodward LLC, and 20 Parkridge LLC.[1] Plaintiffs allege that each of these entities was formed and controlled by defendant Simonse. We shall hereafter follow the complaints’ convention in referring to these eight defendants as the “Simonse Entities.”

            Plaintiffs allege the Simonse Entities were “participants, aiders and abettors in the wrongful activities alleged herein . . . , and the liability of each arises from the fact that each has engaged in all or part of the improper acts, plans, schemes or transactions, which operate a fraud against plaintiff.” They “had actual knowledge of the acts and conduct complained of herein and participated in the furtherance of the fraudulent acts.” The Simonse Entities “have participated as members of the conspiracy, or acted in furtherance of it, or aided or assisted in carrying out the fraudulent purposes . . . , and have performed acts and made statements or representation in furtherance of the conspiracy and in so doing aided and abetted the fraudulent conduct” of Chetcuti, Simonse and other defendants.

            It is further alleged the Simonse Entities “are being sued as alter egos of defendant Simonse.” Plaintiffs allege, on information and belief, that there exists “a unity of interest between defendants Simonse and the Simonse Entities, such that any individuality and separateness between defendant[] Simonse and defendants Simonse Entities have ceased, and each defendant Simonse entity is the alter ego of defendant Simonse, in that the defendants Simonse Entities are not adequately capitalized, or the capitalization was completely illusory; defendant Simonse commingled and used assets of the defendants Simonse Entities for his personal use; and that the defendants Simonse Entities were mere shells, instrumentalities, or conduits through which defendant Simonse carried on his business and affairs.” The complaints continue, stating that “Adherence to the fiction of the separate existence of each of the defendants Simonse Entities . . . would sanction fraud and promote injustice” in that Chetcuti has transferred money borrowed from individuals to the Simonse Entities and Simonse has transferred assets to the Simonse Entities. Also, “defendant Simonse can transfer title to the subject property to any one of the defendants Simonse Enterprises at any time to perpetrate the fraud,” as he did in transferring title to the properties securing plaintiffs’ loans “without any consideration and without regard to any company formalities.” Plaintiff Chokatos alleges that the Magnate Fund companies among the Simonse Entities were once lien holders on at least 100 properties and, a year later, were lien holders on only five properties, suggesting that they transferred assets to other entities.

            The Simonse Entities demurred to plaintiffs’ third amended complaints. The demurrers were sustained without leave to amend. The court found: “Plaintiff has not alleged facts showing that an injustice would result if the separate existence of the moving defendants is respected. Plaintiff has alleged that an injustice might result in the future, but this [is] insufficient to pierce the corporate veil. Moreover, plaintiff seeks reverse piercing, which is not available in California. (Postal Instant Press, Inc. v. Kasawa Corp. (2008) 162 Cal.App.4th 1510). Amendment is most unlikely to cure these defects.”

discussion

            On appeal “from a judgment of dismissal following the sustaining of a demurrer without leave to amend, we give the complaint a reasonable interpretation, and treat the demurrer as admitting all material facts properly pleaded.” (Joseph v. Johnson (2009) 178 Cal.App.4th 1404, 1409.) “The denial of leave to amend is appropriate only when it conclusively appears that there is no possibility of alleging facts under which recovery can be obtained. ‘A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.’ ” (Cabral v. Soares (2007) 157 Cal.App.4th 1234, 1240-1241.)

            The central claim here is fraud. “The elements of common law fraud are: ‘(1) a misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (or scienter); (3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damage.’ ” (AREI II Cases (2013) 216 Cal.App.4th 1004, 1021-1022.) It is undisputed that the complaints adequately state causes of action for fraud against Chetcuti, Simonse and the companies that borrowed money from plaintiffs, recorded deeds of trust, received title to disputed properties or otherwise directly participated in allegedly fraudulent transactions. In dispute is the liability of companies allegedly controlled by Simonse, the Simonse Entities. The Simonse Entities argue that the allegations are insufficient to establish their liability for acts of fraud committed by others.

            Plaintiffs assert that the Simonse Entities are the alter egos of defendant Simonse and, in the only argument they advance on appeal, seek to impose liability on that basis. [2] Traditionally, the alter ego doctrine is used to establish liability upon an individual for the acts of a corporation and not, as here, to establish liability upon a corporation for the acts of an individual. (Postal Instance Press, Inc. v. Kasawa Corp., supra, 162 Cal.App.4th at p. 1513.) “Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations. [Citations.] A corporate identity may be disregarded—the ‘corporate veil’ pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation. [Citation.] Under the alter ego doctrine, then, when the corporate form is used to perpetrate a fraud, circumvent a statute, or accomplish some other wrongful or inequitable purpose, the courts will ignore the corporate entity and deem the corporation’s acts to be those of the persons or organizations actually controlling the corporation, in most instances the equitable owners.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538.)

            The Simonse Entities correctly argue that plaintiffs’ allegations do not present a traditional use of the alter ego doctrine. Plaintiffs allege that the corporate Simonse Entities “are being sued as alter egos of defendant Simonse,” which reverses the usual case of an individual held responsible for the acts of a corporation. A California court has emphatically rejected third party “reverse piercing of the corporate veil, by which the corporate veil is pierced to permit a third party creditor to reach corporate assets to satisfy claims against an individual shareholder.” (Postal Instance Press, Inc. v. Kasawa Corp., supra, 162 Cal.App.4th at p. 1513.) The court noted that “Traditional piercing of the corporate veil is justified as an equitable remedy when the shareholders have abused the corporate form to evade individual liability, circumvent a statute, or accomplish a wrongful purpose. [Citations.] [¶] The same abuse of the corporate form does not exist when the judgment debtor is the shareholder. In that situation, the corporate form is not being used to evade a shareholder’s personal liability, because the shareholder did not incur the debt through the corporate guise and misuse that guise to escape personal liability for the debt.” (Id. at p. 1522.)

            Plaintiffs’ arguments, in large measure, attempt third party reverse piercing of the corporate veil, which is foreclosed by Postal Instance Press, Inc. v. Kasawa Corp., supra, 162 Cal.App.4th 1510. The trial court was correct in this regard. But the trial court was incorrect in denying leave to amend because “there is a reasonable possibility an amendment could cure the defect.” (AREI II Cases, supra, 216 Cal.App.4th at p. 1012.) The cure lies in another variant of vicarious liability known as the single enterprise rule.

            “[U]nder the single-enterprise rule, liability can be found between sister companies” or other affiliated companies. (Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220, 1249.) “The theory has been described as follows: ‘ “In effect what happens is that the court, for sufficient reason, has determined that though there are two or more personalities, there is but one enterprise; and that this enterprise has been so handled that it should respond, as a whole, for the debts of certain component elements of it.” ’ ” (Id. at pp. 1249-1250.) The single enterprise rule recognizes that “it would be unjust to permit those who control companies to treat them as a single or unitary enterprise and then assert their corporate separateness in order to commit frauds and other misdeeds with impunity.” (Id. at p. 1249.)

            We reject the Simonse Entities’ argument that amendment should not be permitted because alter ego liability under the single enterprise rule is inconsistent with plaintiffs’ “theory of their cases at the trial court level.” It is true that plaintiffs’ allegations focus on corporate liability for Simonse’s acts, rather than liability between corporations, and thus the allegations fail to support a single enterprise theory as presently stated. But the allegations are consistent with the single enterprise rule and, in fact, mirror many of the factors used to establish liability upon corporations engaged in a single enterprise. “Factors for the trial court to consider” when assessing alter ego liability under the single enterprise rule “include the commingling of funds and assets of the two entities, identical equitable ownership in the two entities, use of the same offices and employees, disregard of corporate formalities, identical directors and officers, and use of one as a mere shell or conduit for the affairs of the other.” (Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1342; accord Greenspan v. LADT LLC (2010) 191 Cal.App.4th 486, 512-513 [listing factors].) Plaintiffs allege the Simonse Entities “engaged in all or part of the improper acts, plans, schemes or transactions, which operate a fraud against plaintiff”; acted in concert; have “a unity of interest”; “commingled and used assets” are controlled by the same individual (Simonse); lack adequate capitalization; and are “mere shells, instrumentalities, or conduits through which defendant Simonse carried on his business and affairs.” The complaints also allege that Magnate Fund #2 LLC, which remains a defendant in the case, transferred property to 55 Woodward LLC in one case, and to 20 Parkridge LLC in the other, without consideration in a concerted effort to defraud plaintiffs. Further, the complaints allege that “Chetcuti himself transferred money borrowed from individuals like [plaintiffs] to the other Simonse Entities directly, like Magnate Fund #3 and LHJS.” The allegations suggest the Simonse Entities and other defendants acted as a single enterprise. Amendment of the pleadings will permit plaintiffs an opportunity to develop that claim.

Disposition

            The judgments are reversed. The cases are remanded to the trial court with directions to grant plaintiffs leave to amend their complaints. Plaintiffs shall recover costs incurred on appeal upon timely application in the trial court. (Cal. Rules of Court, rule 8.278.)

                                                                                    _________________________

                                                                                    Pollak, J.

We concur:

_________________________

McGuiness, P. J.

_________________________

Siggins, J.

---

[1] Most defendants were dismissed from both lawsuits. However, 55 Woodward LLC remains a defendant in Maranghi’s suit over the Woodward Street property. Likewise, 20 Parkridge LLC remains a defendant in Chokatos’s suit over the Parkridge Drive property.

[2] Plaintiffs’ complaints also contain conspiracy allegations but they make no effort on appeal to assert conspiracy as a basis for liability. We therefore do not reach the issue of whether plaintiffs have alleged, or could sufficiently allege, a basis for imposing liability on these entities grounded on a conspiracy theory. Nothing in our opinion should be construed to endorse or to preclude conspiracy allegations in future pleadings. (See AREI II Cases, supra, 216 Cal.App.4th at pp. 1021-1025 [setting forth elements of conspiracy to defraud].)

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PHILIP KAHN v. BENNY CHETCUTI, JR.,

Filed 8/12/02

CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

PHILIP KAHN et al.,                                                        

            Plaintiffs and Respondents,                                  A096670

            v.                                                                                 (San Mateo County

                                                                                                Super. Ct. No. 405408)

BENNY CHETCUTI, JR.,

                                                                                               

            Defendant and Appellant.

_____________________________________/

            In this dispute arising from the sale of a home to respondents, seller Benny Chetcuti, Jr., appeals from a judgment confirming an award in a contractual arbitration and denying his petition to correct the award.  He contends (1) the arbitrator exceeded his powers, and (2) the arbitrator erred procedurally when he awarded attorney fees and costs to respondents.  In the published portion of the opinion, we interpret the parties’ agreement to authorize the arbitrator to determine whether the prevailing party’s act of filing a complaint before an obligatory mediation barred the award of attorney fees to that party.  That determination, we conclude, is not subject to judicial review. We reject the second argument in the unpublished portion of our opinion and affirm the trial court’s judgment.

            I.  FACTUAL AND PROCEDURAL BACKGROUND

            In March 1995, appellant purchased a residence located on Edgehill Drive in Burlingame as a business investment.  Appellant renovated the property and then listed it for sale.  Respondents Philip and Mara Kahn purchased the residence from appellant in June 1996 for $455,000.  The purchase agreement contained clauses stating that any disputes arising out of the contract must be mediated, and if that was unsuccessful, submitted to binding arbitration. The agreement also provided that the prevailing party in any arbitration or other legal proceedings was entitled to reasonable attorney fees, with a limitation on the right to fees where an arbitrator determined that a party otherwise entitled to fees resisted mediation.  

            In April 1998, Lori Lutzker, an attorney representing respondents, sent a letter to appellant alleging he had failed to disclose certain defects that were present in the residence.  Acknowledging the alternative dispute resolution clauses in the purchase agreement, Lutzker demanded that appellant submit the dispute to mediation.

            Gerald Filice, an attorney, replied to Lutzker’s letter on appellant’s behalf.  He denied that appellant had made any misrepresentations, but he agreed to “undertake” mediation.  He urged Lutzker to submit the names of potential mediators.

            In the weeks that followed, Lutzker and Filice exchanged a series of letters trying to select an appropriate mediator.  That process was still not complete by late June 1998, and Lutzker became concerned that the statute of limitations for certain claims respondents had against appellant might pass.  Hoping to “avoid [an] unnecessary legal action” Lutzker drafted an agreement and sent it to Filice, asking him to waive “all applicable statutes of limitations during the time when we are attempting to resolve the dispute through mediation and arbitration.”

            Filice refused to sign the agreement.  Therefore, on July 2, 1998, Lutzker filed a complaint against appellant on respondents’ behalf.  Respondents did not intend to proceed with the litigation.  They filed the complaint solely to preserve their legal rights.  In fact, Lutzker prepared a stipulation proposing to stay the action pending the conclusion of the arbitration.

            The mediation was conducted in September 1998.  It was unsuccessful.  The parties then proceeded to arbitration.

            An arbitration hearing was conducted before an attorney selected by the parties, William L. Nagle, on three days in January and February 2001.  During the arbitration, both parties agreed that the issue of attorney fees would be litigated after the arbitrator had issued his initial award.

            On February 15, 2001, the arbitrator issued his award and memorandum of decision.  He ruled respondents were entitled to $100,000 in damages, but that those damages were subject to a $50,000 setoff based on sums respondents had received from their broker and real estate agent.  Thus respondents were awarded $50,000 from appellant.  The arbitrator also ruled respondents were the prevailing parties and that they were entitled to their attorney fees and costs under the terms of the arbitration agreement.

            On April 3, 2001, respondents filed a memorandum with the arbitrator setting forth the fees and costs they had incurred.  Appellant then filed what he described as a motion to strike and to tax costs.  He raised two issues that are relevant here.  First, appellant argued the arbitrator exceeded his authority when he awarded attorney fees and costs to respondents because respondents had filed a complaint before the mediation hearing.  According to appellant, that act (filing the complaint) precluded an award of fees and costs under the terms of the purchase agreement.  Second, appellant argued the arbitrator lacked jurisdiction to award fees and costs because respondents’ application for those fees and costs was a “correction” to the arbitration award that was not “timely” under the California arbitration statutes.  (See Code Civ. Proc.,[1] § 1280 et seq.)

            The arbitrator held a hearing on the fee request on May 14, 2001.  On May 31, 2001, the arbitrator issued his written ruling awarding respondents $83,289.75 in attorney fees, plus $13,638.95 in costs.

            Appellant then filed a petition in the San Mateo Superior Court seeking to correct the arbitration award.  As is relevant here, he raised the same two issues that he raised before the arbitrator in his motion to strike and to tax costs.

            On June 18, 2001, respondents filed a petition to confirm the arbitration award.

            Both petitions were heard by the court at a hearing on July 17, 2001.  The court denied appellant’s motion to correct the award and granted respondents’ request to confirm.  In addition, the court awarded respondents an additional $3,690 in attorney fees.  This appeal followed.

            II.  DISCUSSION

            A.  Did the Arbitrator Exceed his Power?

            Appellant contends the trial court should have granted his motion to correct the arbitration award because the arbitrator exceeded his powers when it awarded attorney fees and costs to respondents.  Whether the arbitrator exceeded his powers presents a question of law that we decide de novo on appeal.  (Creative Plastering, Inc. v. Hedley Builders, Inc. (1993) 19 Cal.App.4th 1662, 1666.)

            The pivotal question a court must answer when deciding whether an arbitrator exceeded his powers is whether the arbitrator had the authority to rule on a particular issue under the terms of the controlling arbitration agreement.  (Creative Plastering, Inc. v. Hedley Builders, Inc., supra, 19 Cal.App.4th at p. 1666; Southern Cal. Rapid Transit Dist. v United Transportation Union (1992) 5 Cal.App.4th 416, 422; cf. DiRussa v. Dean Witter Reynolds, Inc. (2d Cir. 1997) 121 F.3d 818, 824.)  Here, the purchase agreement contains a clause that specifically authorized an award of attorney fees and costs.  It states, “Should any legal or equitable action, arbitration or other proceeding between Buyer and Seller arise out of this agreement, the prevailing party shall be awarded reasonable attorney’s fees and court or arbitration costs in addition to any other judgment or award.”  Clearly the arbitrator had the power to award fees and costs.

            Appellant contends the arbitrator exceeded his powers because he awarded fees and costs to respondents even though such an award was prohibited under the facts of this case.  Appellant bases his argument on the mediation clause contained in the purchase agreement which states in part, “Buyer [and] Seller . . . agree to and shall mediate any dispute or claim between them arising out of this contract. . . .  The mediation shall be held prior to any court action or arbitration. . . .  Should the prevailing party attempt an arbitration or a court action before attempting [to] mediate, THE PREVAILING PARTY SHALL NOT BE ENTITLED TO ATTORNEY FEES THAT MIGHT OTHERWISE BE AVAILABLE TO THEM IN A COURT ACTION OR ARBITRATION. . . .”  (Italics in original.)  Appellant contends respondents were not entitled to fees and costs under this language because they filed a complaint against him before the mediation hearing and thus they “attempt[ed] . . . a court action before attempting [to] mediate.”  Under these circumstances, appellant contends, the arbitrator exceeded his powers when he made such an award.

            We must reject appellant’s argument.  The arbitration clause in the purchase agreement states that the arbitrator was authorized to decide “[a]ny dispute or claim in law or equity arising out of this contract or any resulting transaction . . . . “  One dispute or claim the arbitrator was authorized to decide under this broad language was whether respondents had in fact “attempt[ed] . . . a court action before attempting [to] mediate.”  By rejecting appellant’s motion to strike and to tax costs, the arbitrator impliedly concluded respondents had not “attempt[ed] . . . a court action before attempting [to] mediate.”  (Cf. Rosenquist v. Haralambides (1987) 192 Cal.App.3d 62, 67 [“courts must indulge every reasonable intendment to give effect to arbitration proceedings”]; Griffith Co. v. San Diego Col. for Women (1955) 45 Cal.2d 501, 516, [same]; see also Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 381 [courts must defer to an arbitrator’s implied findings].)  The arbitrator did not “exceed his powers” when he decided an issue he was clearly authorized to decide.

            Appellant seems to contend that because respondents filed a complaint against him before the mediation hearing the arbitrator had no alternative but to conclude that respondents had “attempt[ed] . . . a court action before attempting [to] mediate.”  However “the merits of a controversy that has been submitted to arbitration are not subject to judicial review.  This means that we may not review the validity of the arbitrator’s reasoning, the sufficiency of the evidence supporting the award, or any errors of fact or law that may be included in the award.”  (Harris v. Sandro (2002) 96 Cal.App.4th 1310, 1313.)

            Our deference to the arbitrator’s implied ruling should not be interpreted as meaning that we somehow disagree with his decision.  Absent a restriction to the contrary, “‘arbitrators . . . may base their decision upon broad principles of justice and equity, and in doing so may expressly or impliedly reject a claim that a party might successfully have asserted in a judicial action.”’  (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 10-11, quoting Sapp v. Barenfeld (1949) 34 Cal.2d 515, 523.)  “‘[A]rbitrators are not bound to award on principles of dry law, but may decide on principles of equity and good conscience, and may make their award ex aequo et bono [according to what is just and good].’”  (Id. at p. 11, quoting Muldrow v. Norris (1852) 2 Cal. 74, 77.)

            Here, the evidence shows respondents filed a complaint against appellant prior to the mediation hearing.  However, the evidence also shows respondents only did so because the statute of limitations for some of their claims was about to pass, and appellant’s counsel refused to sign an agreement waiving the statute of limitations.  Furthermore, the evidence shows respondents did not intend to pursue the suit, and that they filed it only to preserve their legal rights.  The arbitrator reviewing this evidence could reasonably conclude respondents did not, in any real sense, “attempt . . . a court action before attempting [to] mediate.”

            Appellant’s final argument on this issue is that the arbitrator exceeded his power as that concept is interpreted in DiMarco v. Chaney (1995) 31 Cal.App.4th 1809.  We disagree.  In DiMarco, the parties to a real estate transaction submitted their dispute to arbitration under a contract that said the prevailing party “shall be entitled to reasonable attorney’s fees and costs.”  (Id. at p. 1812, fn. 1.)  The arbitrator ruled the seller was the prevailing party but declined to award her fees and costs.  The appellate court ruled the arbitrator had exceeded his powers under those circumstances because “having made a finding [the seller] was the prevailing party, the arbitrator was compelled by the terms of the agreement to award her reasonable attorney fees and costs.”  (Id. at p. 1815.)[2]

            DiMarco is distinguishable because here, the arbitrator did not find that respondents had “attempt[ed] . . . a court action before attempting [to] mediate.”  Indeed precisely the opposite is true.  By rejecting appellant’s motion to strike and tax costs, the arbitrator impliedly made an opposite finding.  DiMarco is inapposite.

            We conclude the arbitrator did not exceed his powers when he awarded respondents their attorney fees and costs.[3]

            B.  Did the Arbitrator Err Procedurally when he Awarded Attorney Fees and          Costs?

            Appellant contends the arbitrator erred procedurally when he awarded respondents their attorney fees and costs.  His argument in premised upon the fact that the arbitrator issued his initial award in favor of respondents on February 15, 2001, that respondents filed their application for fees and costs on April 3, 2001, and that fee award itself was made on May 31, 2001.  Appellant contends the fee award was a “correction” to the initial award that was governed by section 1284.  According to appellant, the fee award was invalid because respondents did not file their application for a correction within 10 days of the initial award, and the arbitrator made his corrections within 30 days of the initial award, both of which are required by section 1284.[4]

            We reject this argument because it is based on a false premise: i.e., that the omission of attorney fees and costs from the initial award, and their subsequent addition in the May 31, 2001 fee award was a mistake to which section 1284 applied.  In fact, the parties agreed at the initial arbitration hearing that the issue of attorney fees would be decided by the arbitrator after the initial arbitration award.  Thus, when respondents filed their application for attorney fees after the initial award, they were not seeking a correction that triggered the provisions of section 1284.  They were simply following the procedure to which the parties had agreed.

            It is certainly not unusual to bifurcate an arbitration hearing in this manner.  As a well respected treatise explains, “Where an attorney fees award is authorized, the arbitrator will usually advise the parties after the conclusion of the initial hearing who is the prevailing party so that an application for fees can thereafter be made by that party.  (It is inefficient to require presentation of such evidence in the initial hearing because the information will necessarily be incomplete and both parties would be required to go to the effort of making such presentations.)  [¶] The arbitrator’s decision or order at the conclusion of this initial phase is not an ‘award’ as that term is used in [section] . . . 1284.”  (The Rutter Group, Cal. Practice Guide, Alternative Dispute Resolution (2001) § 5:422.5, p. 5-164.)

            We conclude the arbitration award was not invalid because respondents and the arbitrator failed to comply with section 1284.

            The primary case appellant cites, Rosenquist v. Haralambides, supra, 192 Cal.App.3d 62, does not convince us a contrary conclusion is appropriate here.  In Rosenquist, a dispute arose between a property owner and an architect.  The parties had signed an agreement that contained an arbitration clause, so they submitted their dispute to binding arbitration.  The arbitrator conducted a hearing and took the matter under submission.  The arbitrator needed additional time to make his decision, so the parties agreed to an extension of time until October 5, 1984.  On October 2, 1984, the arbitrator issued his ruling in favor of the architect.  The arbitrator also said he was reserving jurisdiction for the purpose of making an award of attorney fees.  After additional briefing by the parties, the arbitrator awarded fees and costs to the architect on November 2, 1984.

            On appeal, the property owner argued the court had acted in excess of his jurisdiction because the November 2, 1984 award was issued after the October 5, 1984 date agreed to by the parties.  The appellate court rejected this argument explaining its decision as follows, “the question of the entitlement of attorney fees had been submitted to the arbitrator by both parties by virtue of their posthearing briefs.  Yet, the record of the arbitration proceedings establishes that neither the briefs nor hearing testimony provided the arbitrator with evidence upon which he could base an award of attorney fees.  Implicit in this procedure is the fact that the parties agreed that the amount of attorney fees would be determined subsequent to the arbitrator’s decision on the merits of the controversy.  In light of these facts, it was both necessary and proper for the arbitrator to extend the time for the purpose of fixing an amount in attorney fees to be paid by [the property owner].  [¶]  The procedure for determining the amount in fees to be paid ordinarily follows the decision as to who is the prevailing party.  To do otherwise would require both sides to file all of their documentation in support of attorney fees prior to the decision of the arbitrator on the merits of the dispute.  It is clear this was not the intention of the parties. The record in this case establishes that the parties contemplated the award of attorney fees would follow a determination on the merits of the dispute.”  (Id. at p. 67.)

            Appellant cites Rosenquist as holding that the decision to award attorney fees is a “correction” that triggers the application of section 1284.  We find nothing in the case that stands for that proposition.  Rosenquist is inapposite.

            We conclude the arbitrator did not err procedurally when he awarded respondents their attorney fees and costs.

            III.  DISPOSITION

            The judgment confirming the award and denying appellant’s petition to correct the award is affirmed.       

                                                                                                _________________________

                                                                                                Jones, P.J.

We concur:

________________________

Stevens, J.

________________________

Simons, J.

Trial court:                                                                San Mateo County Superior Court

Trial judge:                                                                Hon. Phrasel L. Shelton

Counsel for plaintiffs

and respondents:                                                      Robert A. Nebrig

                                                                                    Carr, McClellan, Ingersoll, Thompson

                                                                                    & Horn

Counsel for defendant

and appellant:                                                           Gerald W. Filice

                                                                                    Filice Law Offices

---

* Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with the exception of part II.B.

[1]          Unless otherwise indicated, all further section references will be to the Code of Civil Procedure.

[2]          Our Supreme Court recently took note of the decision in DiMarco but declined to decide whether its reasoning was correct.  (See Moshonov v. Walsh (2000) 22 Cal.4th 771, 779.)  We too need not state an opinion on the issue because the case is distinguishable.

[3]          Having reached this conclusion, we need not reach respondents’ argument that any limitation on the right of the prevailing party to recover attorney fees would be unenforceable.

[4]          Section 1284 states, in part, “The arbitrators, upon written application of a party to the arbitration, may correct the award . . . not later than 30 days after service of a signed copy of the award on the applicant.  [¶] Application for such correction shall be made not later than 10 days after service of a signed copy of the award on the applicant.”

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Torres Mother died in San Bruno Fire 2010 - Sister killed in Martinez Shootout 2008, Brother killed Murder/Suicide

By PETE BENNETT - Contra Costa Watch EMAIL
Phone: 510-460-5641
Posted: 12/15/2013


Walnut Creek CA:  In 2004 my truck burst into flames, in 2005 someone tried to kill me and my sons on 680, in 2005 I nearly died from bacterial non-specific infection.

In April 2004 my wife filed for divorce by August my truck was on fire (Arson) by September I was beaten up by a Danville Building Inspector, by October Chris Butler appeared at 161 Valle Vista Danville, then Lombardi, Danville Officers Tierney, Murphy and Sunderland were pulling  me over.

Today we know that was Abuse of Authority Under Color of Law which is why Chris Butler was arrested, why my former neighbor was convicted in Federal Court in September 2013.

Connection the San Bruno Fire and the death of John Kelly former BART police officer and his friend Craig Wilson who along with Eric Nunn perished in June 2008 just 48 hours after we spoke on the phone.  The phone records were taken along with my servers when I was forced to flee SFPD Lt. David Oberhoffer who is well known to Walnut Creek Police officers both current and former Officers.  Right after I tried to get help from WCPD Officers Jay Hill and Lt. Sinkcovich used veiled threats of arrests outside McDonalds.

The Chetcuti Players

1204 Alpine Road Walnut Creek CA
Regional Parking

Hill should be removed from duty and his service revolver taken, weapons and house checked for bomb devices.

Somewhere in the 90s Benny Chetcuti Jr. And Associates began operation at 1204 Alpine Road Walnut Creek, he's married to Kim Power who is related the owner of Regional Parking towed my Ford Explorer off and pretty much fucked me over.  A few months ago someone torched B & D Towing the fucking tow yard that fucked me over.  Hmm, 12 months later I traced fucking Chetcuti to Rose Marie Chetcuti as in Married to Chris Butler (Federal Fucking Prison) to one of his decoys being Ashlely who know Chuck Silverman (Dead), and Tanabe who knows Loretta Hale (Dead) and the all know my ex-wife and between Walnut Creek, Alamo, B &D Towing, and San Bruno there have some really big fucking fires.

I am the only one alive .....  fuck Walnut Creek Police as their officers could have shut down Benny Chetcuti ten years ago or more.
Has anybody noticed that these fucking idiots also knew Craig Wilson who was killed with Eric Nunn candidate office who knows another deceased BART officer who committed suicide in 2007 and that these killing clowns knew Officer Lombardi in San Ramon where Roma Bhatia was found dead on 680 weeks after I gave documents to Chief Bryden on Nov. 1st 2011 then Gary Collins who definitely knows Tanabe, that leads to Nate Greenan killed in Orinda which leads to attorneys representing Contra Costa Va.

Eustacio Torres Jr. ( - )

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Eustacio Torres Jr. Former Martinez Resident Eustacio Torres Jr., born in Orange County and raised in Martinez, California, passed on Sunday, July 19th 2009 at the age of 41. Eustacio was a loving and kind man dedicated to his family and community. Eustacio was a graduate of Alhambra High School and an alumnus of San Francisco State University where he majored in Science and Biology and a minor in Chemistry. Always a passionate athlete, Eustacio achieved the designation of "All American" in wrestling while attending SFSU. At the impressive age of 18 Eustacio became a license contractor in the State of California as a way to finance his education. When Eustacio saw a need, he would try to fill it. Whether it was coaching Alhambra High School's wrestling team, helping his parents, family, or friends, he always took great pride in sharing with others. In 1998, he relocated to Southern California to pursue graduate school studies. Thereafter, a career change led him to continue honing his craft as a General Contractor. Surely and steadily he became the sole proprietor of Sharp Construction, a development and remodeling firm located in San Diego, California. With numerous successful projects completed under his tenure, Eustacio will leave long standing examples of his dedication and commitment to the building industry. He also built pride and love in his family and friends through his compassionate heart and we will be a long standing example of his everlasting love. Eustacio lovingly known as "Stash" or "Tacho" is survived by his Mother Rafaela Ruvalcaba Torres; Father Eustacio Torres Sr.; siblings Guillermo, Silvia, Patricia, Noe; brothers-in-law Alberto and Alfonso; his nieces and nephews he loved as his own, Rafael, Nicolas, Victoria, Luis, Moises, Isabella, AJ and great-nephew Andrew. He was preceded in death by his beloved sister Catalina Torres. All who knew and loved Eustacio are invited to Saint Catherine's Catholic Church located at 1125 Ferry Street in Martinez, to a visitation vigil on Friday July 24th at 4pm. A funeral service will follow on Saturday July 25th at 11am. In lieu of flowers, a memorial fund will be accepting donations at Wells Fargo Bank account #2629533015.

- See more at: http://www.legacy.com/obituaries/contracostatimes/obituary.aspx?pid=130236937#sthash.I5b85zXW.dpuf

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